USD/JPY neutral, likely between 110.20/113.10 – UOB

FX Strategists at UOB Group have shifted to neutral from bearish on the pair in the short term.

Key Quotes

“The strong rally from a low of 110.84 was unexpected. The rally appears to be running ahead of itself but there is scope for extension to 112.35. At this stage, a sustained move above this level is not expected (next resistance at 112.70)”.

“The bearish phase that started last Thursday has ended as USD took out the trailing stop-loss at 111.90 (111.99 high at time of writing). The price action is not surprising as we have warned of the waning momentum over the past couple of days. From here, USD is deemed to have moved into a consolidation phase and in view of the outsized drop last week, a broad sideway consolidation between 110.20 and 113.10 would not be surprising”.